Elcos Australia Pty Ltd v James Hardie Building Services & Technologies Ltd

In Elcos Australia Pty Ltd v James Hardie Building Services & Technologies Ltd, the plaintiff, an electrical contractor, claimed against the defendant, a builder and builder's supplier, for moneys allegedly due under a subcontract for work performed at two shopping centres. The dispute centred on whether certain work performed constituted variations to the original scope of the contract and, if so, the value of such variations. The court was required to decide several key issues, including whether a compromise agreement made between the parties on 3 October 1994 was binding, what the terms of that agreement were, and whether the defendant's failure to make payment by 10 October 1994 nullified the agreement. The court also had to consider whether the defendant's subsequent attempt to vary the agreement on 15 November 1994 constituted a repudiation of the original agreement or was induced by economic duress.

The court found that while an agreement to compromise was indeed reached on 3 October 1994, it did not include a term that payment would be made by 10 October 1994. Even if the notation regarding payment by 10 October were considered a term, it would not have been a condition precedent to the existence of the contract. Additionally, the court held that the defendant's attempt to vary the agreement on 15 November 1994 did not constitute a repudiation of the original agreement, as both parties continued to act in accordance with the October agreement. The court also found that the November agreement was unenforceable due to a lack of consideration.

The court declared that the agreement dated 3 October 1994 was valid and binding upon both parties, and that the payment of $450,000 compromised all variations claimed by the plaintiff in respect of site instructions given on or before 2 October 1994. The court ordered the defendant's solicitors to deliver a list of the variation claims it contended were compromised by the agreement, and directed the further hearing of the action to be adjourned to a later date. The defendant's costs of and incidental to the hearing on 15 and 16 February 1999 were to be taxed and paid by the plaintiff.